Low Stock Causes Rental Yield Increase Across UK

by | Apr 1, 2020 | BTL, Commercial, News

According to data from Home.co.uk, landlords across the UK are experiencing substantial rental yields as the scarcity of properties on the market continues to push up rents.

The figures show that the lettings market has 15% less stock than a year ago – with the lack of available rental properties particularly pronounced in the capital – down by 21% in the last year and 51% in the last three years.

The scarcity of rental properties has seen the average rent increase in all regions except East Anglia (where it’s remained the same at £850) between March 2019 and March 2020.

The typical monthly rent (median) of a two-bedroomed property in the six months to March 2019 compared to the six months to March 2020 rose from:

  • Greater London: £1,695 to £1,755.
  • South East: £950 to £975
  • East Midlands, Scotland and Wales: £600 to £625
  • North East: £485 to £495
  • Northern Ireland: £535 to £550
  • North West: £593 to £600
  • Yorkshire and Humber: £550 to £575
  • West Midlands: £650 to £675
  • South West: £750 to £775

From March 2019 to March 2020, the average rental yield rose in five regions:

  • Yorkshire and Humber from 5.3% to 5.4%
  • South West from 4.6% to 4.7%
  • East Midlands from 5.1% to 5.2%
  • North East from 6.1% to 6.3%
  • Wales from 5.7% to 5.8%

Yields have remained the same over the last year in the West Midlands at 5.4%.

Meanwhile, rental yields remain high in the following regions despite slight decreases:

  • Greater London from 5.1% to 5.0%
  • Northern Ireland from 6.8% to 6.6%
  • North West from 5.9% to 5.8%
  • South East from 4.6% to 4.5%
  • East Anglia from 4.5% to 4.4%
  • Scotland from 6.7% to 6.5%

Year-on-year, landlords in many regions are seeing their rental yields grow or remain high.

This is welcome news for buy-to-let investors, additionally, the growth is also vital for the wider property market as rental yields determine the house prices. In area where yields are soaring, the value of homes in the sales market are likely to rise, says Home.co.uk.

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